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Business model canvas_steve_blank_cleantech_open_academy_2012
Business model canvas_steve_blank_cleantech_open_academy_2012
Business model canvas_steve_blank_cleantech_open_academy_2012
Business model canvas_steve_blank_cleantech_open_academy_2012
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Business model canvas_steve_blank_cleantech_open_academy_2012

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  • 320 SBIR Phase 2 companiesGot $500K50% from academiaMix of technologies20% of you will get phase 2b20% of those will succeed13 of you will succeedMost of you think you are in execution modeMost will be a few years old – thinking they are in execution~25 will be a lot olderNot all in the audience will be founders, some will be employeesGraphene Frontiers is the perfect exampleStart with their slidesEmphasize that this process not just works for software but anything with customer/market riskFix the serendipitous DOW meetingGroun flour pharma as a backup
  • Verbalize: Our initial customers will be existing brine treatment companies.
  • Verbalize: Our initial customers will be existing brine treatment companies.
  • Verbalize: Our initial customers will be existing brine treatment companies.
  • Transcript

    • 1. How to Fail Less Business Models andCustomer Development Steve Blank www.steveblank.com @sgblank
    • 2. What We Used to Believe Search Versus Execution
    • 3. Startups are Smaller Versions of Large Companies
    • 4. What We Now KnowSearch Versus Execution
    • 5. Startups SearchLarge Companies Execute
    • 6. What We Used to Believe Strategy
    • 7. All I Need to Do is Execute the Plan
    • 8. Plan MeetsFirst ContactWithCustomers
    • 9. All I Need is the 5- Year Forecast
    • 10. Previous5-Year Plans
    • 11. All I Need to Do is Make the Forecast
    • 12. What We Now Know Strategy
    • 13. Planning comes before the plan
    • 14. Business Models
    • 15. Business Models
    • 16. Search Execution Business Model Operating Plan +Strategy Hypotheses Financial Model
    • 17. What We Used to Believe Process
    • 18. We Built Startups byManaging Processes Product Management + Waterfall Engineering
    • 19. Product Introduction Model Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship
    • 20. Product Introduction Model Concept/ Product Alpha/Beta Launch/Seed Round Dev. Test 1st Ship
    • 21. Waterfall / Product Management Execution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
    • 22. Waterfall / Product Management Execution on Two “Knowns” Requirements Product Features: known Design Implementation Verification Customer Problem: known MaintenanceSource: Eric Rieshttp://startuplessonslearned.blogspot.com
    • 23. What We Now Know Strategy
    • 24. More startups fail froma lack of customers than from afailure of product development
    • 25. Customer Development A Search Strategy
    • 26. Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer & Product Management & Agile Development Agile Development
    • 27. What We Used to Believe Organization
    • 28. Hire and Build aFunctional Organization
    • 29. What We Now Know Organization
    • 30. Founders run a Customer Development TeamNo sales, marketing and business development
    • 31. Search Execution Strategy Business Model Operating Plan + Hypotheses Financial Model Customer Development, Product Management Process Agile Development Agile or Waterfall Development Customer Functional OrganizationOrganization Development Team, by Department Founder-driven
    • 32. SearchStrategy Business Model HypothesesProcess Customer Development, Agile DevelopmentOrganization Customer Development Team, Founder-driven
    • 33. Search ExecutionStrategy Business Model Operating Plan + Hypotheses Financial ModelProcess Customer Development, Product Management Agile Development Agile or Waterfall DevelopmentOrganization Customer Development Functional Organization Team, Founder-driven by Department
    • 34. Part 2 Business Models andCustomer Development
    • 35. What’s A Startup?
    • 36. A temporary organization designed to searchfor a repeatable and scalable business model
    • 37. A temporary organization designed to searchfor a repeatable and scalable business model
    • 38. A temporary organization designed to searchfor a repeatable and scalable business model
    • 39. A temporary organization designed to searchfor a repeatable and scalable business model
    • 40. A temporary organization designed to searchfor a repeatable and scalable business modelA Startup aims to become a company
    • 41. What’s a Business Model?
    • 42. © 2012 Steve Blank
    • 43. Value PropositionWhat Are You Building and For Who?
    • 44. © 2012 Steve Blank
    • 45. Customer Segments Who Are They? Why Would They Buy?
    • 46. © 2012 Steve Blank
    • 47. ChannelsHow does your Product Get to Customers?
    • 48. © 2012 Steve Blank
    • 49. Customer RelationshipsHow do you Get, Keep and Grow Customers?
    • 50. © 2012 Steve Blank
    • 51. Revenue StreamsHow do you Make Money?
    • 52. © 2012 Steve Blank
    • 53. Key ResourcesWhat are your most important Assets?
    • 54. © 2012 Steve Blank
    • 55. Key PartnersWho are your Partners and Suppliers?
    • 56. © 2012 Steve Blank
    • 57. Key ActivitiesWhat’s Most Important for the Business?
    • 58. © 2012 Steve Blank
    • 59. Cost StructureWhat are the Costs and Expenses
    • 60. © 2012 Steve Blank
    • 61. But,Realize They’re Hypotheses
    • 62. 9 Guesses GuessGuess Guess Guess Guess Guess Guess Guess Guess
    • 63. Customer DevelopmentTest the Problem, Then the Solution
    • 64. Customer Development The Minimum Viable Product
    • 65. Customer Development The Pivot
    • 66. Customer Development ishow you search for the model
    • 67. How Does This Really Work? Lean LaunchPad Class
    • 68. Total Contacts: 96Red Ox’s Electrochemical Desalination Cell 1. desalinates brine, a waste product from oil & gas and other industries 2. generates electricity quietly and 3. produces bulk inorganics that can be sold as commodities.André Taylor (PI) David Kohn (EL) Tom Livingston (IM) National Science Foundation Innovation Corps Program May 23, 2012
    • 69. Problem:Saline brine.What is it?Water that is saltier than sea water.It is produced as a waste product of many industrialprocesses. 82
    • 70. Why is it a problem?Saline brine is:1. Environmentally harmful2. Heavily regulated3. Costly to treat and dispose of.
    • 71. What we thought1. Desalination 2. Oil and gas productionPhoto 1: Kay Bailey Hutchison desalination plant Photo 2: a hydraulic fracturing site nearin El Paso Tx. Morgantown Pa. 84
    • 72. What we did: 85
    • 73. What we learned: 1. Desalination 2. Oil and gas production Photo 1: Kay Bailey Hutchison desalination plant Photo 2: a hydraulic fracturing site near in El Paso Tx. Morgantown Pa.
    • 74. Key Partners Key Activities Value Customer Customer -R & D Propositions Relationships Segments-Manufacturers -Engineering -Turns waste cost -Service -Inland and coastal-Utilities customization into revenue -Customization desalination plants-Regulators -Decreased input -Link to value add -Industrial brine -Learn regulatory-Utility Commissions costs / volatility in industrial producers landscape -Quiet electricity ecosystem -Hydrofracking -Foster relationships -Inland and coastal on-site -Improve public operations with stakeholders desalination plants image -Hiring & retention -Industrial brine -Decreased liability -Chemical producers Key Resources -Better public Channels distributors -Hydrofracking image -Chemical End Users -People operations -Decreased -B2B marketing -Chemical Producers -Intellectual permitting time -Service property-Chemical agreements -CO2 sequestration -Licensingdistributors -Brand -Utilities -Energy efficiency arrangements-Chemical Producers -Relationships with -Fuel Cell Mfgs stakeholders and -DOESN’T CAUSE partners EARTHQUAKES Cost Structure Revenue Streams-People -Manufacture / Capital -Royalties from licenses -Chemical sales-R & D -Operation and -Service contracts -Electricity sales–Prototyping maintenance -Engineering consulting -REC sales-Legal fees -Sales and Marketing fees -Brine treatment(IP, Licensing, Regulatory) -Strategic Partnerships contracts
    • 75. Key Partners Key Activities Value Customer Customer -R & D Propositions Relationships Segments -Manufacturers -Engineering -Turns waste cost -Service -Water Treatment -Membrane Mfgs customization into revenue -Customization for Hydrofracking -Utilities -Decreased -Link to value add (Especially -Know regulatory Produced Water) -Regulators disposal costs in industrial landscape -Inlandand coastal -Engineering firms -Decreased input ecosystem -Foster relationships desalination plants-Inland and coastal with stakeholders costs / volatility -Improve public -Quiet electricity image -Industrial brinedesalination plants -Hiring & retention on-site producers-Industrial brineproducers Key Resources -Decreased liability Channels - Electric Utilities (for-Hydrofracking -People -Better public -B2B marketing energy efficiencyoperations -Intellectual image FOR -Possibly investments)-Chem. distributors property CLIENTS -Decreased distributors/-Chemical Producers -Chemical permitting time ? conferences -Brand distributors -Service -Relationships with -Chemical End Users-Other frac water -DOESN’T CAUSE agreements stakeholders and -Chemical Producerstreatment startups partners EARTHQUAKES -Licensing arrangements Cost Structure Revenue Streams-People -Manufacture / Capital -Royalties from licenses -Chemical sales-R & D & Prototyping -Operation and -Service contracts -Electricity sales-Legal fees maintenance -Strategic Partnerships -REC sales(IP, Licensing, Regulatory) -Sales and Marketing -Brine treatment contracts
    • 76. Traditional methods to dispose of saline brine include: Deep well injection Evaporation Pits Photo 4: a small deep well injection rig Photo 5 : a typical wastewater evaporation pit
    • 77. Thought: Problem in the Marcellus Texas:~50,000 Class II Disposal Wells (at least 80% for enhanced recovery) Pennsylvania: 8 Class II Disposal Wells
    • 78. Price for water treatment ~60x higher than wethought!
    • 79. ServiceWell Owner Providers (Fracking, O nsite recycling) Engineering Firms Regulators (WaterRights, Dispos Primaryal, Permitting) Treatment Facility Technology Developers / Vendors Secondary Treatment Contractor Disposal Companies
    • 80. DisposalProduced Dilution with Water Freshwater Reuse to Frac Another Well Primary How high can Treatment they go? This is where we Tertiary fit in Treatment Current state of Discharge the art are evaporators and Must be crystallizers drinking water quality
    • 81. Drilling Flowback Produced Water Water WaterWater from drilling First 30 days of Produced overmuds used to drill production well’s operating well life (4-30 years) Medium TDS High TSS Very high TDS ~5-20 % of injected (usually 100,000 Small ppm or higher) quantity, weird stuff in it ~5-20 % of injected
    • 82. Class II Wells Primary and Tertiary Treatment Cost of 0.50-1.50 10.00-12.00 5.00-6.00 Disposal ($/bbl) Transport 4.00-16.00 2.00-4.00 1.00-4.00Cost ($/bbl) Total 4.50-17.50 12.00-16.00 6.00-10.00 ($/bbl)
    • 83. “Moe! don’t throw out that brine!”
    • 84. North American Produced Water Market TAM: $5 bn/yr SAM: $3 bn Target: $0.5 bnOur projections:~ $21 million/year revenues from one10,000 barrel per day plant<5% of current treatment and disposal in PA
    • 85. DisposalProduced Dilution with Water Freshwater Reuse to Frac Another Well Primary Treatment Tertiary = ~$1/bbl/hr Treatment Discharge
    • 86. SaltProcessing Treatment Storage Drop-Off
    • 87. Risks1. Market risk: increasing reuse lowers disposal rate2. Technology risk3. Unable to sell into chemical markets 101
    • 88. Key Partners Key Activities Value Customer Customer -R & D Propositions Relationships Segments-Manufacturers -Engineering -Turns waste cost into -Water Treatment-Integrators customization revenue -Make it easy for for Oil and Gas-Membrane Mfgs -Decreased them to get rid of (Especially -Know regulatory disposal costs and their waste Produced Water)-Engineering firms landscape volume -Brand = good PR -Service Providers -Foster relationships -Decreased for Oil and Gas-Hydrofracking with stakeholders transport costs -Oil and Gasoperations -Hiring & retention -Decreased input Owner/Operators-Service providersfor oil and gas costs / volatility and Key Resources Channelsindustry freshwater volume-Oil and Gas -People -Quiet electricityOwner/Operators -Intellectual -B2B marketing -Chemical property -Better public -Possibly distributors-Other frac water image for clients distributors/ -Chemical End Userstreatment startups -Brand -Decreased conferences -Chemical Producers -Relationships with permitting time -Oil &gas well-Environmental stakeholders and service providers/Groups/Regulators -Doesn’t Cause partners Earthquakes manufacturers Cost Structure Revenue Streams-People -Manufacture / Capital -Royalties from licenses -Chemical sales-R & D & Prototyping -Operation and -Service contracts -Electricity sales-Legal fees maintenance -Strategic Partnerships -REC sales(IP, Licensing, Regulatory) -Sales and Marketing -Brine treatment contracts
    • 89. Key Partners Key Activities Value Customer Customer -R & D Propositions Relationships Segments- Produced Water -Engineering -Service Providers -DecreasedTreatment customization -Make it easy for for Oil and Gas disposal costs andcompanies them to get rid of Water Treatment volume -Know regulatory their waste for Oil and Gas-Service providers -Decreased landscape -Brand = good PR (Especiallyfor oil and gas transport costs -Foster relationships Produced Water)industry -Valuable with stakeholders -Oil and Gas-Oil and Gas Coproducts -Hiring & retention Owner/OperatorsOwner/Operators -Quiet electricityRESEACH ARMS Key Resources Channels -People-Manufacturers -Intellectual -Better public -Chemical -Chemical-Membrane Mfgs property image for clients Distributors distributors-Engineering firms -Decreased -Oil &gas well -Chemical End Users -Brand permitting time service providers -Chemical Producers -Relationships with -Doesn’t Cause and water-Environmental stakeholders and Earthquakes treatmentGroups/Regulators partners companies Cost Structure Revenue Streams-People -Manufacture / Capital -Royalties from licenses -Chemical sales-R & D & Prototyping -Operation and -Service contracts -Electricity sales-Legal fees maintenance -Strategic Partnerships -REC sales(IP, Licensing, Regulatory) -Sales and Marketing -Brine treatment 103 contracts
    • 90. Why Do We Do This?
    • 91. Additional Resources• I-Corps class summary:http://steveblank.com/2012/03/26/the-national-science-foundation-innovation-corps-what-america-does-best/• I-Corps team presentations:http://www.slideshare.net/sblank/tagged/i-corps• Resources for startups: http://steveblank.com/tools-and-blogs-for-entrepreneurs/• Books for startups: http://steveblank.com/books-for-startups/• Additional resources: http://steveblank.com/slides/

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